History vs. Future

Tyler Bruch | Sep 01, 2009

Next in a series from Iowa farmer Tyler Bruch, Global Ag Investments, whose firm farms about 32,000 acres in Brazil and 40,000 acresin Ukraine.

I was born in February 1980, roughly 29 years ago. (A long way back if you ask me!) My parents recall it was a dry year and the crops suffered on our Iowa farm. I always thought it was odd that after 29 years they can recall what kind of crop year they had and remember it in detail.

While it was a dry year in Iowa back then, it's ironic that western Bahia has not had a year as wet as last year's cropping season since 1980…or roughly 29 years ago.

My last column was in the April 2009 issue, and I talked about how we needed another 40 days of moisture and we'd have a real beauty of a crop. Well, we received good moisture alright and then some…two extra months of then some.

The rain just kept coming and coming, making harvest a living hell. We had one period of 18 days straight rain where we never turned a wheel, and a span where we only cut six days out of the entire month.

Before our eyes, 50-bu. beans became 35-bu. beans. Statewide average loss was around 20-35% due to the heavy rains. Cotton productivity was off 30% or more in most cases. The bottom bolls on the plants rotted off and fell on the ground; the rest of the cotton was of subpar quality. Corn and popcorn had stand issues from stalk rot, and crews were sent in to pick up the downed corn by hand to get as much as we could.

We had one farm that received 107 in. of rainfall during the growing season. Normally, we get 70-80 in. If we farmed anywhere else and got that kind of rain, people would have needed Noah to launch the ark.

Looking back, last year was one of great challenges, and the path it left will make the next few years even more challenging. Brazilian farmers in 2008-2009 were faced with historically high fertilizer, fuel and chemical prices, pushed by all-time high commodity prices.

THE PROBLEM IS that high input prices and high output prices can only serve as a true hedge to one another if crop production is at least average or better, but below-average crop damages can rack up quickly.

Many farmers south of the border have had a tough year, and this is something many of us who have been farming here for the last six to seven years have not had to deal with before. A normal weather pattern is being called for in 2009-2010 — a La Niña year.

Many are expecting Brazil to increase bean acres this year. That's not from the opening of new ground, but from the decrease in cotton and corn acres since beans are cheaper to grow. Many will lean toward whatever will take the least amount of money to put a crop in the ground.

We plan on keeping our crop percentages about the same, taking advantage of very good forward-selling prices from last year's rallies, and will try to leverage the highest cash-earning crops we can from that. We are optimistic that profit levels we enjoyed in the past will be back this season.

We all know farming can be a rollercoaster, and sometimes Mother Nature can throw a loop in there. But all you can do is stand up, smile back and get in line for another ride.